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In this issue:
After the Drought:
What’s Next for Beef
Cattle Producers?
1
What Can You Afford
to Pay for Cows?
2
Farm Transition
Planning
4
Wheat Stocker Decision
Tools
4
Oklahoma Farm Service
Agency Offers Produc-ers
a Free Online News
Service
5
Are Wild Animals Im-pacting
Your Feed Bill?
5
The Management
Calendar
6
Mineral Suppmentation
for Cattle Grazing
Wheat Pasture
7
New/Updated Publica-tions
for Beef Producers
8
Master Cattleman Quarterly
Oklahoma State University
• Derrell Peel
• Roger Sahs
• Damona Doye
• Eric DeVuyst
• Oklahoma Farm
Report
• Chris Richards
• Gordon Groover
• David Lalman
Dec. 2011
Volume 13
At this point there is no reason to be-lieve
that the drought is over going into
2012. However, unexpected and welcome
moisture in late 2011 reminds us that it
could be. It is just as important to plan
ahead for drought recovery as it is to plan
ahead for managing through a drought.
That is especially true given the unique cur-rent
market conditions of the cattle industry
with respect to both short run and long run
factors. The drought in 2011 in the South-ern
Plains not only impacted producers in
the region directly but also had significant
impacts on cattle markets nationally. The
recovery for the drought, whenever it hap-pens
will likewise have impacts in the
broader cattle market.
The drought caused enough additional
cow liquidation to push herd inventories to
lower levels in 2011. This results in even
tighter feeder supplies in 2012 and beyond,
from which replacement heifers must be
retained in order to rebuild the herd. When
recovery commences, breeding females will
be in very short supply and very expensive.
There will simply not be enough available
females to support widespread repopulation
in one year. Of course, we won’t actually
run out of females; the price will simply get
high enough for a period of time to encour-age
some producers to wait a bit to buy fe-males.
Producers should consider a more
patient recovery strategy of rebuilding cow
herds over a two to four year period. This
may be beneficial to promote optimal recov-ery
and healing of pastures but also fit cattle
market conditions better. Slower herd re-building
could leave some additional forage
available. That opens the door for other
options to complement cow-calf production.
The other major market factor that
should be considered is that higher grain
prices, which are likely to remain well
above long term historical levels, result in
more value for forage based gains on feeder
cattle. Feedlots, facing high ration costs,
have an incentive to purchase heavier feeder
animals and reduce feed use at the feedlot
level. This change in feeder cattle demand
will be even more pronounced in two or
three years when feeder supplies begin to
grow. Thus, the value of additional pounds
on feeder cattle is higher now than ever be-fore.
Producers with forage have more
flexibility now to mix and match cow-calf
and stocker enterprises. For producers with
no interest in or experience with purchased
stockers, this can be accomplished by re-taining
weaned calves in some sort of
stocker or backgrounding program. The
value of post-weaning gains is likely to be
higher from now on. Purchased stockers
can provide even more flexibility to season-ally
utilize excess forages. Permanently
higher grain prices makes forage worth
more for both stocker production and for
cow-calf production. Eventually, in 5-6
years, cattle numbers could increase to a
point where the value for cow-calf produc-tion
is tempered in a cyclical sense but the
value of stocker production is likely to be
permanently higher.
The next few years will be character-ized
generally by record high cattle prices
which imply considerable profit potential
for cow-calf producers. However, cost
management will be paramount and espe-cially
the high cost of replacing females
must be planned and monitored, particularly
for the short run financial implications but
also for the long run profitability implica-tions.
Forage owners will see generally
more potential value for forage based cattle
production whether in weaned calf sales,
After the Drought: What’s Next for Beef Cattle Producers?
Derrell S. Peel, OSU Extension Livestock Marketing Specialist
M aster Cattleman Quarterly Page 2
Unfavorable weather conditions during the past year
have resulted in the partial or complete liquidation of nu-merous
cow herds in Oklahoma. When forage conditions
improve, livestock producers may wish to get back in the
game and rebuild their herds. Capi-tal
purchases that involve breeding
stock are difficult to make because
in nearly all cases, the expenditure
is made upfront but the anticipated
benefits from calf production accrue
over the cow’s productive life. Be-cause
replacements are expected to
be costly in the future, a sound
evaluation of cow purchase price is
vitally important to the long-run
financial viability of the business.
Here, we discuss a few factors that
affect the cow purchase decision
and review a spreadsheet tool, the
Cow Bid Price Estimate Calculator,
that can assist in evaluating the
profitability of a specific cow pur-chase
price.
Factors That Impact the Cow Bid
Price
The Cow Bid Price Estimate
Calculator (NPV) uses the Net Pre-sent
Value method of capital invest-ment
analysis. This analysis explic-itly
considers the time value of
money through discounting future
net cash flows by a minimum ac-ceptable
annual rate of return, the
discount rate. Think of the discount
rate as the risk premium needed to
equate the cow purchase with an
investment of similar financial un-certainty
and rate of return. The in-vestment
is judged to be acceptable if the NPV of the cash
flow stream exceeds the initial cow purchase price, that is,
if the NPV is greater than or equal to zero.
What Can You Afford to Pay for Cows?
Roger Sahs, Extension Assistant, and Damona Doye, OSU Extension Economist
and Sarkeys Distinguished Professor
retained feeder sales or purchased stocker production.
Producers should evaluate whether they want to limit their
operation to only weaned calf production on a long term
basis or expand the mix of cow-calf and stocker enter-prises
on a regular basis. The key question for producers
is even more important than it always has been. What
cattle production program maximizes the return to my
investment in forage resources in the coming years?
After the Drought: What’s Next for Beef Cattle Producers?(cont.)
Master Cattleman Quarterly Page 3
While it is impossible to know future prices and
costs with certainty, using the best available information
is important. Factors that impact future net cash flows are
anticipated calf revenues throughout the cow’s productive
life (which depend on weaning weights and prices) along
with the annual expense of maintaining the cow excluding
depreciation and interest. The cow’s salvage value is also
a factor and is based on expected sales weight and price.
Debt financing terms can also be included. The cash flow
stream is not adjusted for income taxes; therefore, the
analysis is on a pre-tax basis.
Results
In the example shown, a cow/calf pair is purchased
for $2,000 (thus, the 100% calf cow crop in Year 1). On
average over the cow’s eight years of calf production,
weaned steer calves are expected to weigh 550 pounds
and heifer calves 500 pounds. Note the historically high
calf-prices used throughout the period. Cow operating
costs are specified at $600 per year. Here, the NPV of the
net cash returns over the cow’s productive life is positive,
indicating that the $2,000 cow/calf pair purchase price is
acceptable and represents a good investment. The analysis
includes an Internal Rate of Return (IRR) calculation and
in the example, a 4.1% return is calculated for the $2,000
originally invested. The IRR is the discount rate that pro-duces
a NPV equal to zero. In the example shown, the
IRR on the cow investment exceeds the discount rate de-sired
by the user and verifies that the purchase price is not
too high. In general investments with an IRR that are
equal to or greater than the discount rate specified are ac-cepted
and those with negative IRRs are rejected.
NPV and IRR are very sensitive to the expected cow
operating cost per year. In the earlier example, cow costs
were assumed to be $600 per cow annually over the cow’s
productive life. Lower cost production with $550 annual
maintenance costs would lead to a NPV of $418 com-pared
to $67 with higher cost production. The table be-low
demonstrates NPV sensitivity associated with several
purchase price and production cost scenarios. Producers
should use their farm records as a basis for cost and pro-duction
values and evaluate a range of scenarios to assess
possible rates.
Note that this tool does not provide insight on whether
debt service obligations associated with cow repurchase
might jeopardize the farm/ranch family’s liquidity situa-tion
and risk-bearing ability during the repayment period.
Using different values for the terms demonstrates this.
For the $2,000 cow/calf purchase price and a 6% loan, the
NPV is approximately $107 for a 3 year loan, $87 for a 4
year loan and $67 for a five year loan with debt service
requirements of $524, $404 and $332 respectively. Thus,
while extending the loan period may make loan repay-ment
more feasible because the annual payment is lower,
the additional interest paid over the life of the loan lowers
the NPV of the investment. Producers will need to man-age
cash very carefully and/or have reasonable credit
terms to meet their financing needs.
Summary
Trying to evaluate projected future income and cash flows
associated with cow repurchase decisions can be compli-cated.
The Cow Bid Price Estimate Calculator, a free
spreadsheet from the Agricultural Economics Extension
website http://www.agecon.okstate.edu/extension/ or bee-fextension.
com website is a decision tool designed to help
address cow purchase decisions under a variety of eco-nomic
scenarios. The users should evaluate expectations
carefully, using a range of production and economic pa-rameters.
The spreadsheet will help producers make the
informed decisions about reinvesting in cows following
drought induced liquidations. Careful analysis is needed
as the opportunities and risks may be great
Cow/calf Purchase
Price
Cow Operating Cost per Year
$550 $600 $650
$1,750 $688 $332 ($19)
$2,000 $418 $67 ($284)
$2,250 $152 ($199) ($550)
Cow Investment Net Present Value Depending on Purchase Price and Production Cost
What Can You Afford to Pay for Cows?(cont.)
Master Cattleman Quarterly Page 4
Due to the drought, stocker producers across the state
did not expect to have access to wheat pasture for this
winter’s grazing period. However, due to favorable fall
growing conditions, wheat pastures are in better shape
than anticipated. So, it is a good time to remind our read-ers
of wheat stocker decision tools available free of
charge from OSU Cooperative Extension Service. Two
tools designed to help with calf purchase decisions are the
Wheat Stocker Budgeting Tool
(http://agecon.okstate.edu/faculty/publications/3394.xlsm)
and the Wheat Stocker Purchase Decision Tool
(http://agecon.okstate.edu/faculty/publications/3416.xlsm)
. A third tool is available to analyze the economics of
grazing beyond first hollow stem, Graze Out Decision
Tool
(http://agecon.okstate.edu/faculty/publications/3443.xlsm).
Wheat Stocker Decision Tools
Eric DeVuyst, Associate Professor & Farm Management Specialist
Some producers have reached the point where they
are not willing to rebuild. Instead, they’ve chosen to tran-sition
away from the farm into retirement or an off-farm
job. To facility transitioning the management and owner-ship
of a family farm, careful planning is required. The
goals of transition planning should be to 1) assure that the
exiting generation has sufficient after-tax income to meet
their retirement goals and 2) assure that the entering gen-eration
has sufficient after-tax income and cash flow to
meet their needs.
Farm transition plans should be written. All parties
should clearly articulate their goals and expectations. If all
parties have express reasonable and obtainable goals, a
transition plan might be feasible. However, transition
plans often fail because at least one party’s expectations
are not being met, but usually those expectations have not
been clearly articulated. For example, an incoming partner
might expect to be able to attend their children’s school
and other functions, while the outgoing partner expects
everyone to continue working until late in the evening.
Unless both parties articulate these expectations and mu-tually
agree on how to resolve conflicting expectations,
the transition will likely fail.
There are several methods to arrange a transition.
Transitions usually start with some arrangement to farm-ing
together. One approach has the retiring generation
hiring an incoming farmer for wages. The incoming
farmer management skills can be developed and tested,
while the ability of the retiring generation to give up con-trol
can be tested. Over a period of time, the incoming
farmer purchases (or works for) percentages of the busi-ness.
A second approach is to share labor and machinery
but each party has their own business. The incoming pro-ducer
will typically trade labor for machinery and rent
land and breeding stock. Over time, the incoming pro-ducer
purchases machinery and breeding stock. A third
approach commonly used is multi-ownership farming.
Here, the incoming producer buys into the business and
increases ownership percentage over time.
Regardless of transition approach, a business organi-zation
will need to be determined. Partnerships, both for-mal
and informal, are common. A formal partnership is
recommended. Partnerships are not taxable entities; prof-its
and losses pass to the individual owners. A note of
caution, each partner is liable for the debts of the partner-ship.
An alternative organization is a corporation, an S-corp,
C-corp or LLC. Each has tax and transferability con-sequences.
For example, an S-corp is not a taxable entity,
where a C-corp is taxable. An LLC can be either a taxable
entity or a non-tax entity, depending on its operating
agreement.
Regardless of transition arrangement and organiza-tion,
there needs to be a plan to transfer assets. A typical
transition involves some combination of assets sales, gift-ing
and leasing. Asset sales typically have tax conse-quences,
including depreciation recapture and capital
gains. Assets can be sold over several years to manage tax
consequences. Assets can be gifted up $13,000 per indi-vidual
($26,000 per couple) without tax obligation for the
individual gifting cash. Any amount over $13,000 in a
year counts against his/her $5 million lift time exclusion.
Leasing spreads income over several years and reduces
capital needs of the incoming producer.
Using a combination of this asset transfer methods,
the capital requirements of the incoming producing can be
managed, tax consequences for the exiting generation can
be reduced and income levels for both parties be assured.
Successful transitions can be facilitated using transi-tion
planning. Legal and tax professionals should be part
of the planning. Your Cooperative Extension Service edu-cators
can help direct you to additional resources to aid
your planning.
Farm Transition Planning
Eric DeVuyst, Associate Professor & Farm Management Specialist
Francie Tolle, executive director for Oklahoma Farm
Service Agency (FSA), announced that that farmers and
ranchers in Oklahoma now have a more efficient, timely
option for receiving important FSA program eligibility
requirements, deadlines and related information.
"FSA is now offering free online communications
through our GovDelivery electronic news service," said
Tolle. "News will now be sent via e-mail right to your
home or farm office or to your Smartphone – allowing
you to receive immediate notification of farm program
news that is pertinent to your agricultural operation."
Through FSA’s GovDelivery electronic news ser-vice,
producers can establish subscriber preferences by
choosing to receive federal farm program information by
topic, by state and/or by county. Producers can select as
many subscriber options as they want, which allows pro-ducers
who farm in multiple counties or across state lines
to receive updates from each county in which they operate
or have an interest.
According to Tolle, GovDelivery is a one-stop shop
for the most up-to-date USDA program information. If,
after using this online system, producers no longer wish to
receive hardcopy newsletters from their local county of-fice,
they should contact the office and make their prefer-ences
known.
"GovDelivery will enable FSA to keep producers
better informed and allow us to conserve resources and
reduce taxpayer expenses associated with the preparation,
printing and distribution of hardcopy newsletters," said
Tolle.
To begin using GovDelivery, subscribe online by
visiting their website
(http://oklahomafarmreport.com/wire/news/2011/11/02212_FS
AEmail11292011_111923.php or contact your local office
for subscription assistance. USDA is an equal opportunity
employer, provider and lender.
Oklahoma Farm Service Agency Offers Producers a Free Online News Service
Oklahoma Farm Report, December 6, 2011
Master Cattleman Quarterly Page 5
The practice of self-feeding cattle provides opportuni-ties
to supply nutrients without the increases in labor and
equipment cost associated with regular feeding. Quick cal-culations
of fuel ($3.00 gallon), vehicle depreciation
($0.25/mile) and labor cost ($9.00/hour) for feeding a
group of 40 head of cattle that are 10 miles away from your
home equates to a cost of approximately $0.50 per head per
visit. These costs and limited labor availability have en-hanced
use of self-feeders with combinations of physical
restrictions and inclusions of dietary ingredients such as
salt to limit feed consumption. The concern with these
types of feeding systems has always been providing proper
amounts of supplement, uniformity of consumption across
the herd, and efficiency of feed usage. Of the self-feeding
situations, creep feeding has received the most research. A
summary of 31 studies showed that, on average, creep feed-ing
increases calf daily gains 0.38 pound per day at a feed
conversion rate of 9 pounds of feed to 1 pound of gain. At
current feed cost, this represents a feed only cost of gain
around $1.45 per pound. A study recently completed at
OSU has indicated that feed disappearance and conse-quently
efficiency of calculated feed conversion may be
greatly influenced by wild animals. With a standard creep
feeder, feed disappearance was at a rate of 2.1 pounds per
calf per day which would be slightly below the average of
the 31 study summary. Feed disappearance from a creep
feeder being developed to prevent access from wild ani-mals
was at a rate of 0.6 pounds per calf per day. This was
in an area around Stillwater where we anticipated minimal
impact of wild animals assuming hogs were the primary
problem for feeders. Video surveillance indicated that rac-coons
and birds were regularly consuming feed out of the
standard feeders. In one video, a single raccoon was able to
dig out approximately 150 pounds of feed onto the ground
in a single visit lasting slightly longer than an hour. This
problem is only confounded in areas that have wild hog
populations that have been noted to empty feeders within a
few days. If tracks or waste of wild animals are present
around feeders, low cost game cameras may be used to de-termine
the extent of a problem.
If wild hogs appear to be a significant problem, the
Oklahoma Department of Agriculture, Food and Forestry
has recently developed a web site (http://www.ag.ok.gov/
ais/feralswine.htm) and directories to pair land owners with
hog hunters and trappers. Currently, the directory has over
500 individuals interested in hunting listed by county. Land
owners may view the listings and contact hunters without
being placed on the landowner list. Assuming the differ-ence
in feed disappearance in our study was solely related
to wild animal usage, approximately 2/3 of our feed cost
was expended on wild animals.
Are Wild Animals Impacting Your Feed Bill?
Chris Richards, Beef Cattle Extension Specialist and Associate Professor, OSU Animal Science
Master Cattleman Quarterly Page 6
Farm business managers should consider putting the fol-lowing
activities on their management calendar for De-cember
and January.
• Before the end of the year (calendar tax year filers), fol-low
up on end-of-year tax management strategies rec-ommended
by your tax advisor. Additional information
can be found in IRS publication 225 Farmer’s Tax
Guide at http://www.irs.gov/pub/irs-pdf/p225.pdf. Hard
copies of Farmer’s Tax Guide can be obtained from
many of your public libraries.
• Begin closing out the farm books by collecting informa-tion
for the farm net worth statement. Around the first
of the year when you need to walk off all that holiday
food, take a notepad or try out the new camera and/or
cell phone as you walk around the farm. Record the
number and approximate value of all the farm assets
(cattle, tractors, machinery, buildings, inventories of
grains and feedstuffs, chemicals, etc.) that can be organ-ized
on the asset side of the balance sheet. Be sure to
save the notes, recording, or, better yet, place the notes
or recording in a safe location (safety deposit box or
fireproof box) for possible insurance claims. Review
your end-of-year bank statements or contact your lender
for current listings for all personal and business liabili-ties.
You now have all the information you need to
complete a market value net worth statement.
• If you are using cash accounting methods for tax pur-poses
(computerized business records or hand-kept),
you need to make sure your actual records match the
deposits and check dates for all claimed income and
expenses. A quick check of the records will help ad-dress
any problems that might arise at tax time.
• Plan to get all tax records summarized and to your tax
advisor by February 1, 2012.
• Use 2011 financial and production records to develop
projected budgets, cash flow, and income statements for
2012. If you are using Quicken or QuickBooks, use the
automated feature to create a budget based on last year
as a starting place to create a detailed budget to reflect
your expected costs and returns for 2012. Need instruc-tions
for using Quicken for farm/ranch records? See
agencon.okstate.edu/quicken
• Depending on the type of farm, begin working on a
marketing plan for 2012 by collecting information on
prices and world market situations.
• Keep up-to-date on the release of economic, crop condi-tions
and estimates, world agricultural situation and out-look,
and many other USDA reports by looking at the
USDA report calendar at
http://www.usda.gov/wps/portal/usda/usdahome?navid=
AGENCY_REPORTS.
• Check on crop insurance policies by visiting the Risk
Management Agency website at
http://www.rma.usda.gov/ to find an agent and view the
multitude of policies (crops, livestock, forages, vegeta-bles
nursery, clams, and more) that are available in your
area.
• Close out and summarize livestock and/or crop records
for 2011, noting problems that must be addressed when
making cropping, feeding, and breeding decisions dur-ing
2012. Compare 2011 records to previous years look-ing
for strengths and weaknesses.
• Review 2011's crop, hay, and livestock records for labor
problems, bottlenecks, and down times. Include all em-ployees
in spotting and planning to correct labor bottle-necks.
Draw up a labor flow chart listing estimated
times and identify employees who will be responsible
for major tasks. This is very important if you have ex-panded
acreage, livestock numbers, and/or replaced an
employee or changed the number of employees.
• Schedule regular meetings with all workers and family
members to discuss work activities as you gear up for
the spring push. Make sure all workers feel free to sug-gest
ways to improve efficiency. Think about creating
an employee handbook for important information on
pesticide safety, farm bio-security, and safe operations
of machinery and equipment.
• Selective information that might be useful to farmers
and their advisors:
• An article titled “Move Over Brother; the Farmer’s
Daughter is Coming Home to the Farm, Too!” by Julia
Nolan Woodruff, former OSU Extension Educator, is an
additional resource for families planning the transition
of their farm business. This article appeared in the Octo-ber
issue of the “Ohio Ag Manager:”
http://ohioagmanager.osu.edu/financial-management/
move-over-brother-the-farmer%
E2%80%99s-daughter-is-coming-home-to-the-farm-
too/.
• Need help understanding and using financial state-ments?
The Center for Farm Financial Management has
The Management Calendar
Gordon Groover (groover@vt.edu), Extension Economist, Farm Management,
Department of Agricultural and Applied Economics, Virginia Tech
Master Cattleman Quarterly Page 7
created a new online workshop series to help agricul-tural
producers and/or anyone who works with them to
understand and use common financial statements and
measures. The website, Interpreting Financial State-ments
and Measures (IFSaM), is intended to teach pro-ducers
the basics of interpreting the four major financial
statements and the 21 financial measures recommended
by the Farm Financial Standards Council. IFSaM is a
series of online videos that producers can work through
at their own pace. Each session provides benchmarks,
based on actual farms, that producers can use to evalu-ate
their own financial position and their financial per-formance.
Case farm examples are used to bring the
data to life. There are also optional “test your knowl-edge”
quizzes at the end of each session. In total, there
is over 2 ½ hours of information. Best of all, it’s free.
This series was created with funding from the North
Central Risk Management Education Center. IFSaM is
located at http://ifsam.cffm.umn.edu/.
• If you are interested in improving your management
skills, take a look at the on-line products and courses
from RightRisk. RightRisk is an innovative risk re-search
and education effort to help farmers and ranchers
understand and explore risk management decisions and
evaluate the effects of those decisions. One product you
should view is “Getting on Track: Better Management
Through Basic Financial Statements,” a free online
course just posted to the RightRisk (http://rightrisk.org/)
web site. The course covers:
◊ Cash Flow Statements
◊ Balance Sheets
◊ Income Statements
◊ Statement of Owner Equity
◊ Where Do I Go From Here?
• A must read for all of us involved in agriculture is the
current issue of “Choices,” published by the Agricul-tural
and Applied Economics Association and found at
www.choicesmagazine.org/. In this issue, themes in-clude:
Critical Issues for Agricultural Cooperatives,
Should Soft Drinks Be Taxed More Heavily, and Inno-vating
Policy for Chesapeake Bay Restoration.
The Management Calendar (cont.)
Mineral Supplementation for Cattle Grazing Wheat Pasture
David Lalman, OSU Extension Beef Specialist
In recent years, several experiments have demon-strated
that cattle grazing wheat pasture gain faster when a
free-choice mineral product is provided. These commer-cial
mineral products can be characterized as high-calcium
(16 to 20%), low-phosphorus (3 to 6%) formula-tions.
In a two year study, Horn et al. (2002) reported increased
daily weight gains of .16 (yr 1) and .26 (yr 2) lb by steers
given free-choice access to a non-medicated mineral mix-ture
compared with no supplement. Addition of the feed
additive, Rumensin® (1620 g per ton) to the non-medicated
mineral mixture improved daily gains by .31
(yr 1) and .15 (yr 2) lb per steer.
In another experiment (Fieser et al., 2006) documented an
increase in performance of 0.27 lb per day over cattle that
were not supplemented. Mineral intake was high, averag-ing
6.7 ounces per head per day. Similar to the previous
work, the addition of Rumensin® further increased ADG
by an additional 0.24 lb per day. While Rumensin® in-creased
weight gain, it also moderated mineral consump-tion
with an average daily intake of 2.6 ounces.
At the USDA research station near Woodward, OK
Gunter and Combs (2010) reported that cattle supple-mented
with a commercial mineral product gained 0.5 lb
per day faster compared to cattle not receiving a mineral
supplement. Mineral consumption averaged 2.6 ounces
per head per day.
These experiments demonstrate a consistent improvement
in animal performance when a free-choice commercial
mineral supplement is provided. It should be noted that in
each case, the mineral products provided were formulated
specifically for wheat pasture. The addition of the iono-phore
(feed additive), Rumensin®, increases performance
beyond the response that can be attributed to the mineral.
Rumensin® has also been shown to reduce the risk of
bloat for cattle grazing wheat pasture. However, similar
improvements in performance have been observed when
the ionophore Bovatec�� is incorporated into the mineral
mix. Therefore, producers should consider the potential to
improve wheat pasture grazing enterprise profitability by
providing a mineral supplement and one of these feed ad-ditives
in the mineral mix.
Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education
Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national
origin, religion, sex, age, disability, or status as a veteran in any of its policies, practices or procedures. This includes nut is not limited to admissions, employment,
financial aid, and educational services.
Damona Doye
515 Ag Hall
damona.doye@okstate.edu
Master Cattleman Quarterly Page 8
New/Updated Publications for Beef Producers
David Lalman
201 Animal Science
david.lalman@okstate.edu
CR-205 Oklahoma Farm and Ranch Custom Rates, 2011-2012
If you don't’ receive our Farm Management Quick Tips newsletter, take a look at it online at agecon.okstate.edu/quicken/
under Newsletters. The upcoming edition will include articles on Quicken 2012, “Preventing Elder Fraud”, “Who is Go-ing
to Fill These Boots”, “The Basics of Investing”, “Income Tax Relief for Drought or Weather-Related Sale of Live-stock”,
“Five Reasons You Need to Have a Lease” and Schedule F changes. The September edition featured:
“Understanding the U.S. Credit Downgrade”, “External Drives as the Modern Digital Backup”, “Disaster Preparation
and Recovery Assistance”, “Quicken Records May Simplify the IRS Audit Process”, “Loans and Grants: ODAFF,
SARE, FSA” and “Farm Assets Remain a Large Portion of the Operator Household Portfolio”.

In this issue:
After the Drought:
What’s Next for Beef
Cattle Producers?
1
What Can You Afford
to Pay for Cows?
2
Farm Transition
Planning
4
Wheat Stocker Decision
Tools
4
Oklahoma Farm Service
Agency Offers Produc-ers
a Free Online News
Service
5
Are Wild Animals Im-pacting
Your Feed Bill?
5
The Management
Calendar
6
Mineral Suppmentation
for Cattle Grazing
Wheat Pasture
7
New/Updated Publica-tions
for Beef Producers
8
Master Cattleman Quarterly
Oklahoma State University
• Derrell Peel
• Roger Sahs
• Damona Doye
• Eric DeVuyst
• Oklahoma Farm
Report
• Chris Richards
• Gordon Groover
• David Lalman
Dec. 2011
Volume 13
At this point there is no reason to be-lieve
that the drought is over going into
2012. However, unexpected and welcome
moisture in late 2011 reminds us that it
could be. It is just as important to plan
ahead for drought recovery as it is to plan
ahead for managing through a drought.
That is especially true given the unique cur-rent
market conditions of the cattle industry
with respect to both short run and long run
factors. The drought in 2011 in the South-ern
Plains not only impacted producers in
the region directly but also had significant
impacts on cattle markets nationally. The
recovery for the drought, whenever it hap-pens
will likewise have impacts in the
broader cattle market.
The drought caused enough additional
cow liquidation to push herd inventories to
lower levels in 2011. This results in even
tighter feeder supplies in 2012 and beyond,
from which replacement heifers must be
retained in order to rebuild the herd. When
recovery commences, breeding females will
be in very short supply and very expensive.
There will simply not be enough available
females to support widespread repopulation
in one year. Of course, we won’t actually
run out of females; the price will simply get
high enough for a period of time to encour-age
some producers to wait a bit to buy fe-males.
Producers should consider a more
patient recovery strategy of rebuilding cow
herds over a two to four year period. This
may be beneficial to promote optimal recov-ery
and healing of pastures but also fit cattle
market conditions better. Slower herd re-building
could leave some additional forage
available. That opens the door for other
options to complement cow-calf production.
The other major market factor that
should be considered is that higher grain
prices, which are likely to remain well
above long term historical levels, result in
more value for forage based gains on feeder
cattle. Feedlots, facing high ration costs,
have an incentive to purchase heavier feeder
animals and reduce feed use at the feedlot
level. This change in feeder cattle demand
will be even more pronounced in two or
three years when feeder supplies begin to
grow. Thus, the value of additional pounds
on feeder cattle is higher now than ever be-fore.
Producers with forage have more
flexibility now to mix and match cow-calf
and stocker enterprises. For producers with
no interest in or experience with purchased
stockers, this can be accomplished by re-taining
weaned calves in some sort of
stocker or backgrounding program. The
value of post-weaning gains is likely to be
higher from now on. Purchased stockers
can provide even more flexibility to season-ally
utilize excess forages. Permanently
higher grain prices makes forage worth
more for both stocker production and for
cow-calf production. Eventually, in 5-6
years, cattle numbers could increase to a
point where the value for cow-calf produc-tion
is tempered in a cyclical sense but the
value of stocker production is likely to be
permanently higher.
The next few years will be character-ized
generally by record high cattle prices
which imply considerable profit potential
for cow-calf producers. However, cost
management will be paramount and espe-cially
the high cost of replacing females
must be planned and monitored, particularly
for the short run financial implications but
also for the long run profitability implica-tions.
Forage owners will see generally
more potential value for forage based cattle
production whether in weaned calf sales,
After the Drought: What’s Next for Beef Cattle Producers?
Derrell S. Peel, OSU Extension Livestock Marketing Specialist
M aster Cattleman Quarterly Page 2
Unfavorable weather conditions during the past year
have resulted in the partial or complete liquidation of nu-merous
cow herds in Oklahoma. When forage conditions
improve, livestock producers may wish to get back in the
game and rebuild their herds. Capi-tal
purchases that involve breeding
stock are difficult to make because
in nearly all cases, the expenditure
is made upfront but the anticipated
benefits from calf production accrue
over the cow’s productive life. Be-cause
replacements are expected to
be costly in the future, a sound
evaluation of cow purchase price is
vitally important to the long-run
financial viability of the business.
Here, we discuss a few factors that
affect the cow purchase decision
and review a spreadsheet tool, the
Cow Bid Price Estimate Calculator,
that can assist in evaluating the
profitability of a specific cow pur-chase
price.
Factors That Impact the Cow Bid
Price
The Cow Bid Price Estimate
Calculator (NPV) uses the Net Pre-sent
Value method of capital invest-ment
analysis. This analysis explic-itly
considers the time value of
money through discounting future
net cash flows by a minimum ac-ceptable
annual rate of return, the
discount rate. Think of the discount
rate as the risk premium needed to
equate the cow purchase with an
investment of similar financial un-certainty
and rate of return. The in-vestment
is judged to be acceptable if the NPV of the cash
flow stream exceeds the initial cow purchase price, that is,
if the NPV is greater than or equal to zero.
What Can You Afford to Pay for Cows?
Roger Sahs, Extension Assistant, and Damona Doye, OSU Extension Economist
and Sarkeys Distinguished Professor
retained feeder sales or purchased stocker production.
Producers should evaluate whether they want to limit their
operation to only weaned calf production on a long term
basis or expand the mix of cow-calf and stocker enter-prises
on a regular basis. The key question for producers
is even more important than it always has been. What
cattle production program maximizes the return to my
investment in forage resources in the coming years?
After the Drought: What’s Next for Beef Cattle Producers?(cont.)
Master Cattleman Quarterly Page 3
While it is impossible to know future prices and
costs with certainty, using the best available information
is important. Factors that impact future net cash flows are
anticipated calf revenues throughout the cow’s productive
life (which depend on weaning weights and prices) along
with the annual expense of maintaining the cow excluding
depreciation and interest. The cow’s salvage value is also
a factor and is based on expected sales weight and price.
Debt financing terms can also be included. The cash flow
stream is not adjusted for income taxes; therefore, the
analysis is on a pre-tax basis.
Results
In the example shown, a cow/calf pair is purchased
for $2,000 (thus, the 100% calf cow crop in Year 1). On
average over the cow’s eight years of calf production,
weaned steer calves are expected to weigh 550 pounds
and heifer calves 500 pounds. Note the historically high
calf-prices used throughout the period. Cow operating
costs are specified at $600 per year. Here, the NPV of the
net cash returns over the cow’s productive life is positive,
indicating that the $2,000 cow/calf pair purchase price is
acceptable and represents a good investment. The analysis
includes an Internal Rate of Return (IRR) calculation and
in the example, a 4.1% return is calculated for the $2,000
originally invested. The IRR is the discount rate that pro-duces
a NPV equal to zero. In the example shown, the
IRR on the cow investment exceeds the discount rate de-sired
by the user and verifies that the purchase price is not
too high. In general investments with an IRR that are
equal to or greater than the discount rate specified are ac-cepted
and those with negative IRRs are rejected.
NPV and IRR are very sensitive to the expected cow
operating cost per year. In the earlier example, cow costs
were assumed to be $600 per cow annually over the cow’s
productive life. Lower cost production with $550 annual
maintenance costs would lead to a NPV of $418 com-pared
to $67 with higher cost production. The table be-low
demonstrates NPV sensitivity associated with several
purchase price and production cost scenarios. Producers
should use their farm records as a basis for cost and pro-duction
values and evaluate a range of scenarios to assess
possible rates.
Note that this tool does not provide insight on whether
debt service obligations associated with cow repurchase
might jeopardize the farm/ranch family’s liquidity situa-tion
and risk-bearing ability during the repayment period.
Using different values for the terms demonstrates this.
For the $2,000 cow/calf purchase price and a 6% loan, the
NPV is approximately $107 for a 3 year loan, $87 for a 4
year loan and $67 for a five year loan with debt service
requirements of $524, $404 and $332 respectively. Thus,
while extending the loan period may make loan repay-ment
more feasible because the annual payment is lower,
the additional interest paid over the life of the loan lowers
the NPV of the investment. Producers will need to man-age
cash very carefully and/or have reasonable credit
terms to meet their financing needs.
Summary
Trying to evaluate projected future income and cash flows
associated with cow repurchase decisions can be compli-cated.
The Cow Bid Price Estimate Calculator, a free
spreadsheet from the Agricultural Economics Extension
website http://www.agecon.okstate.edu/extension/ or bee-fextension.
com website is a decision tool designed to help
address cow purchase decisions under a variety of eco-nomic
scenarios. The users should evaluate expectations
carefully, using a range of production and economic pa-rameters.
The spreadsheet will help producers make the
informed decisions about reinvesting in cows following
drought induced liquidations. Careful analysis is needed
as the opportunities and risks may be great
Cow/calf Purchase
Price
Cow Operating Cost per Year
$550 $600 $650
$1,750 $688 $332 ($19)
$2,000 $418 $67 ($284)
$2,250 $152 ($199) ($550)
Cow Investment Net Present Value Depending on Purchase Price and Production Cost
What Can You Afford to Pay for Cows?(cont.)
Master Cattleman Quarterly Page 4
Due to the drought, stocker producers across the state
did not expect to have access to wheat pasture for this
winter’s grazing period. However, due to favorable fall
growing conditions, wheat pastures are in better shape
than anticipated. So, it is a good time to remind our read-ers
of wheat stocker decision tools available free of
charge from OSU Cooperative Extension Service. Two
tools designed to help with calf purchase decisions are the
Wheat Stocker Budgeting Tool
(http://agecon.okstate.edu/faculty/publications/3394.xlsm)
and the Wheat Stocker Purchase Decision Tool
(http://agecon.okstate.edu/faculty/publications/3416.xlsm)
. A third tool is available to analyze the economics of
grazing beyond first hollow stem, Graze Out Decision
Tool
(http://agecon.okstate.edu/faculty/publications/3443.xlsm).
Wheat Stocker Decision Tools
Eric DeVuyst, Associate Professor & Farm Management Specialist
Some producers have reached the point where they
are not willing to rebuild. Instead, they’ve chosen to tran-sition
away from the farm into retirement or an off-farm
job. To facility transitioning the management and owner-ship
of a family farm, careful planning is required. The
goals of transition planning should be to 1) assure that the
exiting generation has sufficient after-tax income to meet
their retirement goals and 2) assure that the entering gen-eration
has sufficient after-tax income and cash flow to
meet their needs.
Farm transition plans should be written. All parties
should clearly articulate their goals and expectations. If all
parties have express reasonable and obtainable goals, a
transition plan might be feasible. However, transition
plans often fail because at least one party’s expectations
are not being met, but usually those expectations have not
been clearly articulated. For example, an incoming partner
might expect to be able to attend their children’s school
and other functions, while the outgoing partner expects
everyone to continue working until late in the evening.
Unless both parties articulate these expectations and mu-tually
agree on how to resolve conflicting expectations,
the transition will likely fail.
There are several methods to arrange a transition.
Transitions usually start with some arrangement to farm-ing
together. One approach has the retiring generation
hiring an incoming farmer for wages. The incoming
farmer management skills can be developed and tested,
while the ability of the retiring generation to give up con-trol
can be tested. Over a period of time, the incoming
farmer purchases (or works for) percentages of the busi-ness.
A second approach is to share labor and machinery
but each party has their own business. The incoming pro-ducer
will typically trade labor for machinery and rent
land and breeding stock. Over time, the incoming pro-ducer
purchases machinery and breeding stock. A third
approach commonly used is multi-ownership farming.
Here, the incoming producer buys into the business and
increases ownership percentage over time.
Regardless of transition approach, a business organi-zation
will need to be determined. Partnerships, both for-mal
and informal, are common. A formal partnership is
recommended. Partnerships are not taxable entities; prof-its
and losses pass to the individual owners. A note of
caution, each partner is liable for the debts of the partner-ship.
An alternative organization is a corporation, an S-corp,
C-corp or LLC. Each has tax and transferability con-sequences.
For example, an S-corp is not a taxable entity,
where a C-corp is taxable. An LLC can be either a taxable
entity or a non-tax entity, depending on its operating
agreement.
Regardless of transition arrangement and organiza-tion,
there needs to be a plan to transfer assets. A typical
transition involves some combination of assets sales, gift-ing
and leasing. Asset sales typically have tax conse-quences,
including depreciation recapture and capital
gains. Assets can be sold over several years to manage tax
consequences. Assets can be gifted up $13,000 per indi-vidual
($26,000 per couple) without tax obligation for the
individual gifting cash. Any amount over $13,000 in a
year counts against his/her $5 million lift time exclusion.
Leasing spreads income over several years and reduces
capital needs of the incoming producer.
Using a combination of this asset transfer methods,
the capital requirements of the incoming producing can be
managed, tax consequences for the exiting generation can
be reduced and income levels for both parties be assured.
Successful transitions can be facilitated using transi-tion
planning. Legal and tax professionals should be part
of the planning. Your Cooperative Extension Service edu-cators
can help direct you to additional resources to aid
your planning.
Farm Transition Planning
Eric DeVuyst, Associate Professor & Farm Management Specialist
Francie Tolle, executive director for Oklahoma Farm
Service Agency (FSA), announced that that farmers and
ranchers in Oklahoma now have a more efficient, timely
option for receiving important FSA program eligibility
requirements, deadlines and related information.
"FSA is now offering free online communications
through our GovDelivery electronic news service," said
Tolle. "News will now be sent via e-mail right to your
home or farm office or to your Smartphone – allowing
you to receive immediate notification of farm program
news that is pertinent to your agricultural operation."
Through FSA’s GovDelivery electronic news ser-vice,
producers can establish subscriber preferences by
choosing to receive federal farm program information by
topic, by state and/or by county. Producers can select as
many subscriber options as they want, which allows pro-ducers
who farm in multiple counties or across state lines
to receive updates from each county in which they operate
or have an interest.
According to Tolle, GovDelivery is a one-stop shop
for the most up-to-date USDA program information. If,
after using this online system, producers no longer wish to
receive hardcopy newsletters from their local county of-fice,
they should contact the office and make their prefer-ences
known.
"GovDelivery will enable FSA to keep producers
better informed and allow us to conserve resources and
reduce taxpayer expenses associated with the preparation,
printing and distribution of hardcopy newsletters," said
Tolle.
To begin using GovDelivery, subscribe online by
visiting their website
(http://oklahomafarmreport.com/wire/news/2011/11/02212_FS
AEmail11292011_111923.php or contact your local office
for subscription assistance. USDA is an equal opportunity
employer, provider and lender.
Oklahoma Farm Service Agency Offers Producers a Free Online News Service
Oklahoma Farm Report, December 6, 2011
Master Cattleman Quarterly Page 5
The practice of self-feeding cattle provides opportuni-ties
to supply nutrients without the increases in labor and
equipment cost associated with regular feeding. Quick cal-culations
of fuel ($3.00 gallon), vehicle depreciation
($0.25/mile) and labor cost ($9.00/hour) for feeding a
group of 40 head of cattle that are 10 miles away from your
home equates to a cost of approximately $0.50 per head per
visit. These costs and limited labor availability have en-hanced
use of self-feeders with combinations of physical
restrictions and inclusions of dietary ingredients such as
salt to limit feed consumption. The concern with these
types of feeding systems has always been providing proper
amounts of supplement, uniformity of consumption across
the herd, and efficiency of feed usage. Of the self-feeding
situations, creep feeding has received the most research. A
summary of 31 studies showed that, on average, creep feed-ing
increases calf daily gains 0.38 pound per day at a feed
conversion rate of 9 pounds of feed to 1 pound of gain. At
current feed cost, this represents a feed only cost of gain
around $1.45 per pound. A study recently completed at
OSU has indicated that feed disappearance and conse-quently
efficiency of calculated feed conversion may be
greatly influenced by wild animals. With a standard creep
feeder, feed disappearance was at a rate of 2.1 pounds per
calf per day which would be slightly below the average of
the 31 study summary. Feed disappearance from a creep
feeder being developed to prevent access from wild ani-mals
was at a rate of 0.6 pounds per calf per day. This was
in an area around Stillwater where we anticipated minimal
impact of wild animals assuming hogs were the primary
problem for feeders. Video surveillance indicated that rac-coons
and birds were regularly consuming feed out of the
standard feeders. In one video, a single raccoon was able to
dig out approximately 150 pounds of feed onto the ground
in a single visit lasting slightly longer than an hour. This
problem is only confounded in areas that have wild hog
populations that have been noted to empty feeders within a
few days. If tracks or waste of wild animals are present
around feeders, low cost game cameras may be used to de-termine
the extent of a problem.
If wild hogs appear to be a significant problem, the
Oklahoma Department of Agriculture, Food and Forestry
has recently developed a web site (http://www.ag.ok.gov/
ais/feralswine.htm) and directories to pair land owners with
hog hunters and trappers. Currently, the directory has over
500 individuals interested in hunting listed by county. Land
owners may view the listings and contact hunters without
being placed on the landowner list. Assuming the differ-ence
in feed disappearance in our study was solely related
to wild animal usage, approximately 2/3 of our feed cost
was expended on wild animals.
Are Wild Animals Impacting Your Feed Bill?
Chris Richards, Beef Cattle Extension Specialist and Associate Professor, OSU Animal Science
Master Cattleman Quarterly Page 6
Farm business managers should consider putting the fol-lowing
activities on their management calendar for De-cember
and January.
• Before the end of the year (calendar tax year filers), fol-low
up on end-of-year tax management strategies rec-ommended
by your tax advisor. Additional information
can be found in IRS publication 225 Farmer’s Tax
Guide at http://www.irs.gov/pub/irs-pdf/p225.pdf. Hard
copies of Farmer’s Tax Guide can be obtained from
many of your public libraries.
• Begin closing out the farm books by collecting informa-tion
for the farm net worth statement. Around the first
of the year when you need to walk off all that holiday
food, take a notepad or try out the new camera and/or
cell phone as you walk around the farm. Record the
number and approximate value of all the farm assets
(cattle, tractors, machinery, buildings, inventories of
grains and feedstuffs, chemicals, etc.) that can be organ-ized
on the asset side of the balance sheet. Be sure to
save the notes, recording, or, better yet, place the notes
or recording in a safe location (safety deposit box or
fireproof box) for possible insurance claims. Review
your end-of-year bank statements or contact your lender
for current listings for all personal and business liabili-ties.
You now have all the information you need to
complete a market value net worth statement.
• If you are using cash accounting methods for tax pur-poses
(computerized business records or hand-kept),
you need to make sure your actual records match the
deposits and check dates for all claimed income and
expenses. A quick check of the records will help ad-dress
any problems that might arise at tax time.
• Plan to get all tax records summarized and to your tax
advisor by February 1, 2012.
• Use 2011 financial and production records to develop
projected budgets, cash flow, and income statements for
2012. If you are using Quicken or QuickBooks, use the
automated feature to create a budget based on last year
as a starting place to create a detailed budget to reflect
your expected costs and returns for 2012. Need instruc-tions
for using Quicken for farm/ranch records? See
agencon.okstate.edu/quicken
• Depending on the type of farm, begin working on a
marketing plan for 2012 by collecting information on
prices and world market situations.
• Keep up-to-date on the release of economic, crop condi-tions
and estimates, world agricultural situation and out-look,
and many other USDA reports by looking at the
USDA report calendar at
http://www.usda.gov/wps/portal/usda/usdahome?navid=
AGENCY_REPORTS.
• Check on crop insurance policies by visiting the Risk
Management Agency website at
http://www.rma.usda.gov/ to find an agent and view the
multitude of policies (crops, livestock, forages, vegeta-bles
nursery, clams, and more) that are available in your
area.
• Close out and summarize livestock and/or crop records
for 2011, noting problems that must be addressed when
making cropping, feeding, and breeding decisions dur-ing
2012. Compare 2011 records to previous years look-ing
for strengths and weaknesses.
• Review 2011's crop, hay, and livestock records for labor
problems, bottlenecks, and down times. Include all em-ployees
in spotting and planning to correct labor bottle-necks.
Draw up a labor flow chart listing estimated
times and identify employees who will be responsible
for major tasks. This is very important if you have ex-panded
acreage, livestock numbers, and/or replaced an
employee or changed the number of employees.
• Schedule regular meetings with all workers and family
members to discuss work activities as you gear up for
the spring push. Make sure all workers feel free to sug-gest
ways to improve efficiency. Think about creating
an employee handbook for important information on
pesticide safety, farm bio-security, and safe operations
of machinery and equipment.
• Selective information that might be useful to farmers
and their advisors:
• An article titled “Move Over Brother; the Farmer’s
Daughter is Coming Home to the Farm, Too!” by Julia
Nolan Woodruff, former OSU Extension Educator, is an
additional resource for families planning the transition
of their farm business. This article appeared in the Octo-ber
issue of the “Ohio Ag Manager:”
http://ohioagmanager.osu.edu/financial-management/
move-over-brother-the-farmer%
E2%80%99s-daughter-is-coming-home-to-the-farm-
too/.
• Need help understanding and using financial state-ments?
The Center for Farm Financial Management has
The Management Calendar
Gordon Groover (groover@vt.edu), Extension Economist, Farm Management,
Department of Agricultural and Applied Economics, Virginia Tech
Master Cattleman Quarterly Page 7
created a new online workshop series to help agricul-tural
producers and/or anyone who works with them to
understand and use common financial statements and
measures. The website, Interpreting Financial State-ments
and Measures (IFSaM), is intended to teach pro-ducers
the basics of interpreting the four major financial
statements and the 21 financial measures recommended
by the Farm Financial Standards Council. IFSaM is a
series of online videos that producers can work through
at their own pace. Each session provides benchmarks,
based on actual farms, that producers can use to evalu-ate
their own financial position and their financial per-formance.
Case farm examples are used to bring the
data to life. There are also optional “test your knowl-edge”
quizzes at the end of each session. In total, there
is over 2 ½ hours of information. Best of all, it’s free.
This series was created with funding from the North
Central Risk Management Education Center. IFSaM is
located at http://ifsam.cffm.umn.edu/.
• If you are interested in improving your management
skills, take a look at the on-line products and courses
from RightRisk. RightRisk is an innovative risk re-search
and education effort to help farmers and ranchers
understand and explore risk management decisions and
evaluate the effects of those decisions. One product you
should view is “Getting on Track: Better Management
Through Basic Financial Statements,” a free online
course just posted to the RightRisk (http://rightrisk.org/)
web site. The course covers:
◊ Cash Flow Statements
◊ Balance Sheets
◊ Income Statements
◊ Statement of Owner Equity
◊ Where Do I Go From Here?
• A must read for all of us involved in agriculture is the
current issue of “Choices,” published by the Agricul-tural
and Applied Economics Association and found at
www.choicesmagazine.org/. In this issue, themes in-clude:
Critical Issues for Agricultural Cooperatives,
Should Soft Drinks Be Taxed More Heavily, and Inno-vating
Policy for Chesapeake Bay Restoration.
The Management Calendar (cont.)
Mineral Supplementation for Cattle Grazing Wheat Pasture
David Lalman, OSU Extension Beef Specialist
In recent years, several experiments have demon-strated
that cattle grazing wheat pasture gain faster when a
free-choice mineral product is provided. These commer-cial
mineral products can be characterized as high-calcium
(16 to 20%), low-phosphorus (3 to 6%) formula-tions.
In a two year study, Horn et al. (2002) reported increased
daily weight gains of .16 (yr 1) and .26 (yr 2) lb by steers
given free-choice access to a non-medicated mineral mix-ture
compared with no supplement. Addition of the feed
additive, Rumensin® (1620 g per ton) to the non-medicated
mineral mixture improved daily gains by .31
(yr 1) and .15 (yr 2) lb per steer.
In another experiment (Fieser et al., 2006) documented an
increase in performance of 0.27 lb per day over cattle that
were not supplemented. Mineral intake was high, averag-ing
6.7 ounces per head per day. Similar to the previous
work, the addition of Rumensin® further increased ADG
by an additional 0.24 lb per day. While Rumensin® in-creased
weight gain, it also moderated mineral consump-tion
with an average daily intake of 2.6 ounces.
At the USDA research station near Woodward, OK
Gunter and Combs (2010) reported that cattle supple-mented
with a commercial mineral product gained 0.5 lb
per day faster compared to cattle not receiving a mineral
supplement. Mineral consumption averaged 2.6 ounces
per head per day.
These experiments demonstrate a consistent improvement
in animal performance when a free-choice commercial
mineral supplement is provided. It should be noted that in
each case, the mineral products provided were formulated
specifically for wheat pasture. The addition of the iono-phore
(feed additive), Rumensin®, increases performance
beyond the response that can be attributed to the mineral.
Rumensin® has also been shown to reduce the risk of
bloat for cattle grazing wheat pasture. However, similar
improvements in performance have been observed when
the ionophore Bovatec�� is incorporated into the mineral
mix. Therefore, producers should consider the potential to
improve wheat pasture grazing enterprise profitability by
providing a mineral supplement and one of these feed ad-ditives
in the mineral mix.
Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education
Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national
origin, religion, sex, age, disability, or status as a veteran in any of its policies, practices or procedures. This includes nut is not limited to admissions, employment,
financial aid, and educational services.
Damona Doye
515 Ag Hall
damona.doye@okstate.edu
Master Cattleman Quarterly Page 8
New/Updated Publications for Beef Producers
David Lalman
201 Animal Science
david.lalman@okstate.edu
CR-205 Oklahoma Farm and Ranch Custom Rates, 2011-2012
If you don't’ receive our Farm Management Quick Tips newsletter, take a look at it online at agecon.okstate.edu/quicken/
under Newsletters. The upcoming edition will include articles on Quicken 2012, “Preventing Elder Fraud”, “Who is Go-ing
to Fill These Boots”, “The Basics of Investing”, “Income Tax Relief for Drought or Weather-Related Sale of Live-stock”,
“Five Reasons You Need to Have a Lease” and Schedule F changes. The September edition featured:
“Understanding the U.S. Credit Downgrade”, “External Drives as the Modern Digital Backup”, “Disaster Preparation
and Recovery Assistance”, “Quicken Records May Simplify the IRS Audit Process”, “Loans and Grants: ODAFF,
SARE, FSA” and “Farm Assets Remain a Large Portion of the Operator Household Portfolio”.